How does capital flows affect the impact of trade on economic growth in Africa?

Egyir, John; Sakyi, Daniel; Baidoo, Samuel Tawiah

doi:10.1080/09638199.2019.1692365

Cited by 38 publications

(28 citation statements)

References 36 publications

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“…It must be mentioned that, though the study period spans 1995-2019, the study uses five-year data point averages (1995-1999, 2000-2004, 2005-2009, 2010-2014, 2015-2019) for all variables and the analysis. The reason and motivation for using the five-year averages are that, according to Islam (1995) and Egyir, Sakyi, and Baidoo (2020), it is not helpful to use a relatively longer period for panel analysis. This is because the data are likely to contain outliers which may cause threatening disturbances in the data and subsequently affect the efficacy of the results.…”

Section: Data and Variable Descriptionmentioning

confidence: 99%

An empirical investigation into the determinants of external debt in Asian developing and transitioning economies

Dawood

Baidoo

Shah

2021

Development Studies Research

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This paper investigates the determinants of external debt in 32 Asian developing and transitioning economies for the period 1995-2019. Estimation is carried out using the generalized method of moments (GMM), which is capable of dealing with potential endogeneity problems. The results show that in both the short-and long-run, economic growth and investment reduce external debt, whereas exchange rate, trade, and government expenditure increase external debt. Diagnostic tests confirm the reliability and consistency of our findings, which should be taken into account by policymakers for policy formulation and implementation. Based on our empirical findings, relevant policy implications, aimed at reducing external debt in the selected Asian developing and transitioning economies, are provided for policy consideration.

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Section: Data and Variable Descriptionmentioning

confidence: 99%

An empirical investigation into the determinants of external debt in Asian developing and transitioning economies

Dawood

Baidoo

Shah

2021

Development Studies Research

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“…The GMM, on the other hand, is resilient in accounting for the variety of endogeneity. It gives reliable outcomes even the presence of endogeneity from diverse sources, such as dynamic endogeneity and unobserved heterogeneity (Egyir et al, 2020).…”

Section: Econometric Approachesmentioning

confidence: 99%

The Causal Relationship Between China-Africa Trade, China OFDI, and Economic Growth of African Countries

et al. 2021

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Recently, China has emerged as the largest trading partner and a significant source of investment in the African continent. Although there is consent on the increasing importance of China and Africa’s economic partnership, there are many controversies on how it affects African countries. Debates on China in Africa have, however, relied on grandiloquence rather than empirical studies. This study explores the causal link between China-Africa trade, China’s outward foreign direct (OFDI), and economic growth of 24 Sub-Saharan Africa countries from 1999 to 2018. The aggregated panel is classified into upper-middle-income, low-middle income, and low-income Sub-Saharan African countries. In the long run, key findings from the feasible generalized least squares (FGLS) estimator unveiled that; (i) China-Africa trade negatively contributes to economic growth among all panels. (ii) China’s OFDI improves economic growth in the low middle and low-income African countries whereas a significant negative liaison is evidenced in the upper-middle-income African countries. (iii) Labor force have a negative impact on economic growth whiles gross capital formation is evidenced to positively impact economic growth at all the panels. The Dumitrescu and Hurlin Granger causality unveiled a one-sided causal link from China-Africa trade to economic growth at all panels. The study proposes policy recommendations based on the results.

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“…Based on past studies (Aladejare, 2019; Anyawu, 2014; Boachie, 2017; Egyir et al, 2020; Ho & Iyke, 2018; Moral‐Benito, 2009; Oyebowale & Algarhi, 2020; Sakyi & Egyir, 2017), this study specifies a simple economic growth model as follows:

EG = f ((),,,,,,,, Trade, GS, GFC, FDI, POL, RL, POP, PH)

where economic growth (EG) is a function of trade openness (Trade), government spending (GS), domestic investment (GFC), FDI inflows, political instability (POL), rule of law (RL), population growth (POP) and population health (PH).…”

Section: Model Specification Data and Estimation Strategymentioning

confidence: 99%

“…Since investment and population health are among the main channels via which tobacco taxation can influence economic growth, we introduce interaction terms in Equation as follows:

{EG}_{it} = ϖ_{0} + ϖ_{1} {EG}_{it - 1} + ϖ_{2} Tob_{tax}_{it} + ϖ_{3} {Trade}_{it} + ϖ_{4} {GS}_{it} + ϖ_{5} {GFC}_{it} + ϖ_{6} {FDI}_{it} + ϖ_{7} {POL}_{it} + ϖ_{8} {RL}_{it} + ϖ_{9} {POP}_{it} + ϖ_{10} {PH}_{it} + ϖ_{11} ((), Tob_{tax}_{it} * {GFC}_{it}) + ϖ_{12} ((), Tob_{tax}_{it} * {PH}_{it}) + ϗ_{t} + ε_{it}

thus, ϖ 11 and ϖ 12 are the coefficients of the interaction between tobacco taxation and domestic investment as well as the interaction between tobacco taxation and population health, respectively. It must be stressed that, the variables used for the interactions are subjected to mean centring in order to make their interpretations more meaningful (Brambor et al, 2006; Egyir et al, 2020).…”

Section: Model Specification Data and Estimation Strategymentioning

confidence: 99%

“…Since the introduction of the dynamic term in Equations and implies that, only short‐run estimates of the independent variables will be obtained (see Egyir et al, 2020), this study, follows the Papke and Wooldridge (2005) approach in order to generate long‐run estimates of the independent variables by dividing short‐run coefficients by one less the coefficient of the dynamic term. Given that, this study uses Stata 14.0 for all data analyses, we employ the ‘nlcom’ routine in Stata in order to apply the Papke and Wooldridge (2005) approach for the long‐run estimates.…”

Section: Model Specification Data and Estimation Strategymentioning

confidence: 99%

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An empirical analysis of the effect of tobacco taxation on economic growth in 38 African countries

Immurana

Boachie

Dalaba

et al. 2021

J of Intl Development

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Globally, tobacco use claims millions of lives every year. This has necessitated policy responses including tax measures aimed at reducing the consumption of tobacco. Nonetheless, opponents of tobacco taxation posit that, it may hurt economic growth. This study, therefore, examines the effect of tobacco taxation on economic growth in 38 African countries from 2008 to 2018. The system generalised method of moments (GMM) regression is used as the estimation technique. The findings show that, tobacco taxation enhances economic growth both in the short‐ and long‐run periods, especially, through its effect on population health. Thus, African governments should be confident when increasing tobacco tax because, it has an added advantage of propelling economic growth.

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How does capital flows affect the impact of trade on economic growth in Africa?

Cited by 38 publications

References 36 publications

An empirical investigation into the determinants of external debt in Asian developing and transitioning economies

An empirical investigation into the determinants of external debt in Asian developing and transitioning economies

The Causal Relationship Between China-Africa Trade, China OFDI, and Economic Growth of African Countries

An empirical analysis of the effect of tobacco taxation on economic growth in 38 African countries

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